IMPORT INTO LOGISTICS & FACILITIES
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American Chamber of Commerce for Brazil - AMCHAM International Affairs Department Brazil, 2016/2017 *This guide is part of the project
ACKOWLEDGEMENTS The American Chamber of Commerce for Brazil, being the largest Amcham outside the United States is serving its members building bridges for Brazilian businesses worldwide. Our foreign investment attraction efforts are a key mission for Amcham. The “How To” guides published by Amcham Brasil are part of this initiative. With the support of some of our members and Brazilian states and cities, we are putting together strategic information on the most various aspects of doing business in Brazil and its opportunities. As part of BRICS (Brazil, Russia, India, China and South Africa) and representing the 9th largest economy of the world, and the 8th largest destination for foreign investment, Brazil has an intrinsic importance for the global market. More than ever it is a strategic time for businesses opportunities in Brazil. We welcome you and hope that the information you are about to read will contribute to your commercial and investment decisions linked to Brazil. Deborah Vieitas - CEO, Amcham Brasil Cisa Trading is committed to offering high quality and excellence to its customers in inbound and outbound logistics, import and export processes and financing. This practical and useful manual covers all subjects related to the importation of different products to Brazil. For the fifth consecutive year, Cisa Trading is happy to support an excellent tool published by Amcham. Antonio José Louçã Pargana - President, CISA Trading
LOGISTICS & FACILITIES
CONTENT 01 INTRODUCTION 06 02 IMPORT MODELS 08 03 IMPORT TAXES AND DUTIES 09 04 CUSTOMS-RELATED LITIGATION AND TAX-RELATED LITIGATION 12 ASSOCIATED WITH THE IMPORT 05 INCENTIVES AND FINANCING 15 06 SPECIAL CUSTOMS SCHEMES 16 07 CUSTOMS FORWARDING – PROCESS AND DOCUMENTS 18 08 NONTAXING RULES ENTAILED TO THE IMPORT 21 09 IMPORT PAYMENT METHODS 22 10 LOGISTICS IN BRAZIL 25 11 ABOUT OUR SPONSOR 28
01. INTRODUCTION Up to 1990 Brazil was a closed market for imports. Since Certain procedures should be adopted even before making then the import volumes have increased year after year. the purchase, placing the order with the vendor and shipping the merchandise, since specific goods require Besides the Brazilian Central Bank (Banco Central do licenses even before their shipment. The importer or the Brasil - Bacen), the Ministry of Development, Industry entity ordering the product must register their fiscal and and Trade (Ministério da Indústria, Comércio Exterior financial capacity at Siscomex, in a System called System e Serviços - MDIC), the Secretariat of Foreign Trade of Registration and Tracking of the Customs Agents’ (Secretaria de Comércio Exterior - SECEX), and the Activities (Ambiente de Registro e Rastreamento da Department of Federal Revenue of Brazil (Secretaria da Atuação dos Intervenientes Aduaneiros - RADAR). Receita Federal - RFB), there are other agencies, such as the Brazilian Health Surveillance Agency (Agência The import licenses are obtained from SECEX, which Nacional de Vigilância Sanitária - ANVISA), the Federal checks the conditions stated in the Proforma Invoice1. Police Department (Departamento de Polícia Federal - The license issued by SECEX determines the customs PF), and the Ministry of Agriculture, Livestock and Supply tax treatment, as well as the currency exchange treatment (Ministério da Agricultura, Pecuária e Abastecimento - given by Bacen. MAPA), which are also involved in the import process, depending on the type and fiscal classification of the At the time of nationalization several documents and product. Although there is an integrated computerized actions are required, that is, actions that befall in the course system called Siscomex, which manages and registers of the customs clearance process (despacho aduaneiro). all information related to foreign trade operations, the LOGISTICS & FACILITIES process of importing products into the Brazilian market Once a customs clearance declaration has been filed, is still a complex task, due to the myriad of laws, decrees the goods will proceed through the customs clearance and regulatory instructions regarding the matter. process. In Brazil, in addition to the registration of this 1 - Proforma Invoice: Document issued by the exporter to the importer, in order to formalize the international negotiation process. It can be considered as the first agreement between both parties, while not generating payment obligations by the buyer. 06
declaration, goods are subject to the import parameters •AImport on behalf of Third Parties (Importação defined by the fiscal channels (green, yellow, red and por Conta e Ordem de Terceiros). gray)2. The Customs Broker will be notified, through the Siscomex, when the goods have been released. The proof The importer needs to be cautious with changes to laws and of release is the Import Certificate (CI), printed through regulations, in view of the great number of amendments Siscomex by the importer. that usually occur in the Brazilian legislation. There are three import models, which are: An operating error could be quite costly since Brazil is a country with continental dimensions. Thus, •AImport on Own Account (Importação Própria); logistic planning is very important for a more effective market distribution. •AImport by order (Importação por Encomenda); and 07 HOW TO IMPORT INTO BRAZIL 2 - Fiscal Channels: •AGreen: Automatic clearance of the imports; •AYellow: Clearance after the conference of all documents and of the import declaration (DI); •ARed: Clearance after the conference of all documents of the DI and verification of the goods; and •AGray: Clearance after the conference of the DI, verification of the goods, and the preliminary examination of the customs value.
02. IMPORT MODELS IMPORT ON OWN ACCOUNT The importer sells the merchandise to the local buyer and has no risk regarding the subsequent sales and distribution The importer looks for suppliers, imports the goods and of the imported goods within the domestic market. distributes them throughout the country, being responsible for all logistics procedures. IMPORT ON BEHALF OF THIRD PARTIES Under this model, the importer is the owner of the goods. He/she is responsible for all costs involved in In this model, a purchaser interested in a particular the transaction, financing the operation with his/her own commodity looks for a trading company – the importer – resources, paying the applicable taxes and contracting to import the goods on behalf of the interested buyer. The the currency exchange directly. The importer undertakes the activity risks and enters into commitments with bill of lading/airway bill3 is consigned to the importer, the vendor abroad, sometimes through a distribution who holds the imported product possession, while the agreement or a purchase agreement, and promotes sales ownership belongs to a third party (purchaser/buyer) within the domestic market. who funds the operation. IMPORT BY ORDER Such party has the option of making advance payments to pay for the taxes on the operation and other expenses. Similar to the aforementioned model, the importer (trading The purchaser contracts the currency exchange and the company) is also the owner of the imported goods and importer only provides services. The purchaser and the LOGISTICS & FACILITIES responsible for funding the operation. However, in this format, there needs to be a local buyer, to whom the goods importer are jointly responsible for the taxes levied on the are purchased for. imported goods. 3 - Bill of Lading is a contract between a shipper and carrier listing the terms for moving freight between specified points, used for sea transport. Airway bill is also a contract and has the same conditions, but it is used for air transport. 08 06
03. IMPORT TAXES AND DUTIES IMPORT TAX - II In case of importation, the IPI is levied upon customs clearance of the goods. Similar to II, IPI is payable by Import Tax (Imposto de Importação - II) is a Federal the importer at the moment the DI is registered. The IPI tax payable upon customs clearance of foreign goods, is levied in respect of the price of the import (i.e., the at the moment the import declaration (Declaração de product’s customs value) plus II. Importação - DI) is registered, in respect of the “customs value” of the goods according to the General Agreement The IPI rates vary according to the IPI Tariff Table (TIPI) on Tariffs and Trade (GATT). Regardless of the import that includes the same classification system as TEC. model, the taxpayer is the importer who promotes the entry of goods into the Brazilian territory. The II rate The subsequent transactions, after importing, does also varies according the classification of the imported goods trigger IPI, even when it involves a buy/sell transaction pursuant to the Brazilian External Tariff Code (Tarifa or transference delivery, as the case of import on behalf of Externa Comum - TEC), which includes the same third parties model. classification system as the Harmonized System (HS) as determined by the World Customs Organization (WCO). The IPI is a non-cumulative tax and, therefore, the amount II rate is a non-recoverable tax; therefore, it is a cost to charged in each successive taxable transaction is deducted the importer. from the current transaction. THE STATE VAT - ICMS THE FEDERAL FEDERAL VALUE-ADDED TAX (VAT) - IPI The Tax on the Distribution of Goods and on Interstate and Intermunicipal Transportation and Communication 09 HOW TO IMPORT INTO BRAZIL The Brazilian Federal Value - Added Tax on Manufactured Services (Imposto sobre operações relativas à circulação Products (Impostos sobre Produtos Industrializados - de mercadorias e sobre prestações de serviços de transporte IPI) levies on “finished products” (whether foreign interestadual, intermunicipal e de comunicação - ICMS) or domestic), which are resulting from some sort of is levied by the States on the legal, physical or economic industrial process even if this process is incomplete, circulation of the goods on imported products. The ICMS partial or intermediary. taxpayer is the businessman, manufacturer or producer
who undertakes the shipment of the goods, or who The reduced interstate ICMS rate of 4% does not apply to imports them from abroad and who provides services. In transactions involving: other words, imports and local transactions trigger ICMS including the subsequent transactions of imported product •AImported natural gas; even those imported under the “on behalf of third parties” or ‘‘by order of third parties” models. •AGoods that do not have domestic equivalents (which will be determined by Camex, the Foreign In case of importation, the tax basis for calculation of the Trade Chamber); or ICMS is the customs value of the goods, plus the II, IPI, PIS-Import (see next topic) and COFINS-Import (see next •AGoods that are manufactured under basic topic), the ICMS itself and customs expenses. Regardless productive processes dealt with in Decree-Law of the import model the duty taxpayer is the importer. 288/07 (The Manaus Free Trade Zone), and in Law 8,248/91, Law 8,387/91, Law 10,176/01 and The general ICMS rate imposed by the majority of Law 11,484/07. the Brazilian States on intrastate transactions is 17%. Interstate transactions are usually subject to 12% (or Similar to IPI, ICMS is also a non-cumulative tax. 7% for taxpayers resident in the States of the Northern, Therefore, the ICMS paid may be offset against the Northeast and Middle-east regions, and the Espírito ICMS payable on future transactions. Despite the non- Santo State). cumulative system, as a consequence of RSF 13/2012, the importer may cumulate ICMS credits. As per Resolution 13, dated April 25, 2012 (RSF 13/2012), the Brazilian Federal Senate reduced to 4% the For this reason, among others, current corporate solutions ICMS interstate rate applicable to imported goods. The must include customs planning when importing goods reduction came into effect on January 1st, 2013. The 4% into Brazil comparing direct and indirect import models. rate applies to imported goods that, after clearance, either: CONTRIBUTION TO PIS-IMPORT AND •ADo not undergo any manufacturing process; or COFINS-IMPORT LOGISTICS & FACILITIES •AAfter processing, assembly, packaging, repackaging, renewal or refurbishment, result in PIS-Import and COFINS-Import are both federal goods that have an “imported content”4 of more contributions levied on the entrance of foreign goods into than 40%. Brazilian territory. 4 - RSF 13/12 defines “imported content” as the ratio between the value of the imported portion of the goods and the total value of the goods shown on the ICMS invoice issued on exit of the goods from the seller’s establishment. The rules and procedures to be followed in the Imported Content Certification process will be issued by National Tax Policy Council (Conselho Nacional de Política Fazendária - CONFAZ). 10
These taxes are levied on the customs value of the goods. The applicable tax rates, as well as the possible entitlement to certain credits, will vary according to whether the As a general rule, such contributions are due at PIS-Import’s taxpayer is subject to either the cumulative or non- rate of 2.10% and COFINS-Import’s rate of 9.65%. Under cumulative system contributions. the non-cumulative system, these contributions are levied, as a general rule, at the combined rate of 11.75% Under the cumulative system, as a general rule, these contributions are levied at the combined rate of 3.65% on Based on Provisory Measure No. 563, dated on April 3, revenues arising from the sale of goods and/or rendering 2012 (MP 563/2012), converted into Law No. 12,715, services, without the right to use any credits. dated on September 17, 2012, after August 1, 2012, COFINS-Import’s rate for certain products was increased AFRMM resulting in the total rate of 10.65%. Therefore, such Freight Surcharge for Renewal of the Brazilian Merchant contributions are due at the combined rate of 12.75%. Marine (Adicional ao Frete para Renovação da Marinha Mercante - AFRMM) is a due to support the development PIS/COFINS-Import are charged in line with the non- of merchant marine and shipping construction. cumulative system, in such a way that, if the importer is AFRMM is charged at a general rate of 25% over the taxed under the non-cumulative system, he/she may be international maritime freight and at 10% over the costal entitled to certain credits in relation to PIS/COFINS- navigation freight. Import he/she pays upon the importation of goods. Import transactions in Brazil may face additional costs In case of importing goods under the “on behalf of third and fees, such as Siscomex Fee, harbor, warehousing, parties” model, the purchaser of the imported goods is foremanship fees, etc. entitled to register the PIS/COFINS credits. Internal transactions are also subject to Contribution to PIS on Before importing goods into Brazil, besides the taxes gross revenue and COFINS on gross revenue, which abovementioned, it is also recommendable to verify consist of federal contributions levied on monthly basis, all these costs and fees to better valuate the entire on the company’s revenues. import process. 11 HOW TO IMPORT INTO BRAZIL
04. CUSTOMS-RELATED LITIGATION AND TAX-RELATED LITIGATION ASSOCIATED WITH THE IMPORT FISCAL CLASSIFICATION and import license. An error in valuation may result in the underpayment or overpayment of duties, or in a failure II and IPI rates vary according to the classification of to satisfy import restrictions. Persistent errors may lead the goods in the TEC or TIPI, respectively. Correct to fines and penalties, or shipment delays resulting from classification of products is vital in order to certify that the product examinations by customs officials. right amount of duty is paid and to ensure that any special All products imported into Brazil and submitted to measures which are also linked to the classification code customs clearance are subject of customs value control, may be taken. In case the company fails to establish the which consists of checking the compliance of the customs right classification, it may pay more than due (obtaining value as declared by the importer with the rules set forth a contingent return is a costly process) or less than due in the Customs Valuation Agreement (OMC). The (another costly process that includes fines, which may transport cost, expenses related to the loading, unloading give rise to a lawsuit for failure to pay taxes). and handling, as well as the insurance cost of the product, shall be added to the customs amount. Some items can be CUSTOMS VALUATION excluded (e.g. purchase commissions, interest rates, costs of assembly performed subsequently to the import), but Customs laws require that all imported merchandise be others must be included (e.g. costs of packaging, royalties, valued. Proper valuation is important for many reasons. and licensing fees the purchaser should pay) in order to LOGISTICS & FACILITIES Most types of customs duties are assessed ad valorem – determine the product sum. that is, based on the value of the merchandise. There are six methods available to determine the product Even where duties are assessed on a “specific” basis – customs value. Most countries use a valuation method that based on quantity – valuation is still important. Valuation adopts – or is based on – the World Trade Organization is often used as the basis for customs fees, excise Customs Valuation Agreement. The common method is taxes, and value-added-taxes. It may be a support base based on the actual sales price between the buyer and required for the proper use of the customs declaration seller, with certain adjustments. Other methods exist. 12
Some countries use a method based on the prevailing treatment does not apply) and probably he/she will also export market price of identical, similar, or comparable be subjected to a fine. goods. Some countries use a method based on the domestic price of identical, similar or comparable goods. Brazil applies non-preferential rules under which establishes that when materials or inputs originate from TRANSFER PRICING other countries are used and the manufacturing process consists only of assembling, selecting, fractioning, The effects of the legislation related to the transfer diluting or packing, the product will not be considered as pricing are triggered whenever foreign trade operations originated from that country, even if these operations alter are performed between related parties. The exclusive the product classification at 4 digits5. distributor, even if without a contract, is equally regarded as entailed. The legislation aims at identifying and This measure was designed to avoid initiatives to evade levying assumptions where the profit is made abroad, what occurs in a situation where the importer pays too antidumping duties. Goods that are subject to antidumping “expensive” in the import or sells too “cheap” in the duties, when imported from non-affected countries, shall export, and in both instances the entailed party – abroad be supported with Non-preferential Origin Certificate. – makes a greater profit. EX-TARIFF ORIGIN AND SOURCE A tax exemption or tax reduction may be obtained in In compliance with the trade agreements for industrialized instances when demonstrating that the imported product products, a preferential import tax rate may be applied in has no national similar product. There are currently Brazil, particularly for those products originated from more than 1,000 (one thousand) products in the ex-tariff Mercosul (Argentina, Paraguay, Uruguay and Venezuela listings, released through Resolutions by the Foreign – Bolivia is still in accession process) and from ALADI Trade Chamber of Brazil (www.mdic.gov.br). (Argentina, Bolivia, Chile, Colombia, Ecuador, Mexico, Paraguay, Peru, Uruguay, Venezuela, Cuba and Panama) A national product is regarded as similar to a foreign member countries. In this case, it is essential to identify product and is able to replace it if: upon observing the 13 HOW TO IMPORT INTO BRAZIL the origin of the goods subjected to preferential treatment. equivalent quality and proper specifications for the In order to be benefited with the preferential treatment, a intended purpose, its price is not higher than the cost of valid Origin Certificate is required. Any errors and/or non- the imported product plus the taxes placed on the import, accuracy of the information in such Certificate, will have and has the regular or current delivery time for the same the importer subjected to all taxes due (the preferential type of product. 5 - The tax classification used in Brazil and Mercosur is Mercosur’s Common Classification (Nomenclatura Comum do Mercosul - NCM). The NCM consists of eight digits: chapter; position; subposition at 1st level (simple); subposition at 2nd level (composite); Item and sub item. Ex: 8708.29.99 – 87 (Chapter) 08 (Position) 2 (Subposition at 1st level) 9 (Subposition at 2nd level) 9 (item) 9 (subitem).
It must be generally demonstrated that the national or the interpretation of the legal provision under the industry would not be able to manufacture or offer an inquiry cannot be levied. equivalent to the imported product and the entities, which represent the economic activities are called to pronounce BRAZILIAN FLAGGED VESSEL on the similar production in the country. Goods imported by any organization from the Federal, INQUIRIES State, and Local Public Administration, either directly or indirectly, and any other product to be benefited from Should the taxpayer be in doubt about the law (tax federal tax exemption or reduction has to be transported legislation interpretation) and about the product on a Brazilian flagged vessel. In order to be benefited correct fiscal classification, he/she may formulate an with any tax exemption or reduction, in case there is not administrative Ruling before the competent authorities. possible to ship the goods on a Brazilian flagged vessel, a previous certificate of release of prescribed load As long as the Ruling is pending a solution, the shall be required at the Brazilian National Agency of taxpayer/inquirer that is performing any operation Waterway Transport (Agência Nacional de Transportes relating to payment of taxes on the inquired product Aquaviários - ANTAQ). LOGISTICS & FACILITIES 14
05. INCENTIVES AND FINANCING In order to attract investments, some Brazilian States have de Cargas pelos Portos e Aeroportos Fluminenses - granted fiscal incentives, which consist of a full or partial RIOPORTOS); among dozens of other incentives which reduction of the ICMS applied on the import, in such a were established, structured on the granting of presumed way to minimize the tax cost of the foreign trade operation. credit, debit charge back, reduction of per cent rate or calculation base, payment time extension, or installment Some fiscal incentives worth mentioning are the payment of the tax. Investment Incentive Program in the State of Espirito Santo (Programa de Incentivo ao Investimento no Estado There are also incentives of a financial nature, where the do Espírito Santo - INVEST-ES); Differentiated Tax ICMS is paid in full, but the importer is entitled to favorable Treatment from the State of Santa Catarina (Tratamento financing conditions from the State Development Bank. Tributário Diferenciado - TTD); Promotion of Cargo One of such incentives is the financial incentive from Handling by the Ports and Airports from the State of the State of Espírito Santo through FUNDAP (Fundo de Rio de Janeiro (Programa de Fomento à Movimentação Desenvolvimento das Atividades Portuárias). 15 HOW TO IMPORT INTO BRAZIL
06. SPECIAL CUSTOMS SCHEMES The special customs schemes are intended to boost The tax exemption – under the customs special drawback imports. These tax programs provide benefits in the form regime – is granted on the import of goods to be used in the of exemption, suspension and refund of taxes levied on manufacturing, supplementation or packaging of products imported products or on locally purchased products, to be exported (in a quantity and quality equivalent). It is provided the goods are subsequently exported. an export incentive and may be applied on the following modes: suspension (of the payment of the required taxes TEMPORARY ADMISSION in the import of the product to be exported after the improvement), exemption (of these taxes, in a quantity The goods temporarily admitted to the country for and quality equivalent to that used in the improvement, economic use (providing of services or production of manufacturing, supplementation or packaging of an other goods) are subject to tax payment proportionally already exported product), and return (either in full or in to their stay time in the country. The proportionality is part, of the taxes paid in the import of an item already obtained by taking into account the period of time the exported after improvement). goods remain in Brazil. Each month correspond to 1% of taxes that shall be paid under the proportionality method. The Temporary Admission foresees the total or partial BONDED WAREHOUSE suspension (case of goods for fairs and sporting events, for example). The payment shall be proportional to the This regime allows imported foreign goods (imported length of stay, up to the applicable rate on the permanent with or without currency exchange coverage) to be stored importation. in a bonded area of public use for a period of up to one LOGISTICS & FACILITIES year, renewable for another year, with suspension of the A variant of this regime is the special customs regime of tax payment on the imported goods until nationalization. temporary admission for an active improvement, which allows the entry, for a temporary stay in the country, with This regime further allows a foreign product to remain tax payment suspension, of foreign or de-nationalized at a trade show, exhibition or a similar event, held in a goods intended for active improvement operations private use area previously bonded for such purpose. (industrialization or repair) and further re-export. A product admitted under this regime can be nationalized DRAWBACK (SUSPENSION, and subsequently shipped for consumption, or exported, EXEMPTION, RETURN) by the consignee or purchaser. 16
A product imported with a currency exchange coverage, purposes, the national product deposited in a bonded area, which is intended for export, can be admitted under sold to a person headquartered abroad against a contract this regime. for delivery in the national territory and to the order of the purchaser. The regime may also be operated at a harbor The bonded warehouse special regime at the export allows facility of a mixed private use, upon complying with the the storage of a product intended for export, and comprises provisions stipulated by the Federal Internal Revenue the common regime mode (storage of goods at a public use Service (Secretaria da Receita Federal). room, with tax payment suspension), and extraordinary regime mode (storage of goods at a private use room, with the right to use the fiscal benefits contemplated for export BLUE LINE - EXPRESS CUSTOMS incentive, prior to its actual shipment abroad). The latter CLEARANCE is exclusive for trading companies. This program is also available, and it is based on the TEMPORARY EXPORT international Authorized Economic Operator (AEO) concept. This program promotes voluntary compliance The temporary export regime allows exit from the with customs obligations by offering preferential treatment country – with suspension of the export duty payment in customs clearance procedures for import, export and – of a national or nationalized product, intended for re- transit transactions. The foreign trade operator shall importation within a certain time in the same conditions demonstrate compliance with safety standards applied to and state it was exported. the logistics chain or the tax and customs obligations, as well as with reliability and compliance levels required by The temporary export regime for passive improvement the Brazilian Program of the AEO, in order to be certified. allows the exit from the country, for a certain time, of a Certificated operators in the Brazilian Program of AEO national or nationalized product to be submitted to the will be granted with benefits that relate to the facilitation transformation, preparation, improvement or assembling operation abroad, and the subsequent re-import, in the of customs procedures in Brazil or abroad. form of a resulting product, with payment of taxes on the added value. It also applies to the exit from the country BRAZILIAN AUTHORIZED ECONOMIC of a national or nationalized product to be submitted to a OPERATOR PROGRAM 17 HOW TO IMPORT INTO BRAZIL fixing, repair or restoration process. Brazilian AEO Program is the certification of supply CERTIFIED BONDED WAREHOUSE chain operators that represent low risk in their operations, (DEPÓSITO ALFANDEGADO both in terms of physical security of the cargo as in the CERTIFICADO - DAC) performance of fulfilling requirements. The application to the program is voluntary. Until 2019, Brazilian AEO The certified bonded warehouse regime allows considering Program aims to achieve the target of 50% of export and as exported, for all fiscal, credit, and currency exchange import declarations registered by AEO certified companies.
07. CUSTOMS FORWARDING – PROCESS AND DOCUMENTS COMMERCIAL INVOICE determined by the International Chamber of Commerce (ICC), were developed to promote accordance between The commercial invoice should contain the exporter’s and international businesses and are a condition to be included importer’s full name and address, goods specification, in the purchase and sale agreement, and it does not mean brand, numbering and, if applicable, volume reference that this inclusion will substitute the contract. Usually, the numbers; the quantity and type of volumes; gross weight Incoterms set conditions relating to the place of delivery and net weight; origin, source and acquisition countries; of the product and can include or not conditions related to unit and total price and, if applicable, the amount and the price negotiated, to the expenditure incurred for the nature of the reductions and discounts granted to the freight (inland and/or international), expenditures related importer, freight, and other expenses related to the goods to foremanship, insurance, among others. In Brazil, specified in the invoice; payment terms and currency; and there are restrictions when contracting the freight (even selling condition term (Incoterm). related with flagged vessel nationality) and insurance. They are defined by the type of the product, the country The Federal Internal Revenue Service may formulate of origin, as well as by the eventual tax exemption in the other requirements, the use of electronic process, import process. requirement of a consular visa, instances of non- requirement, instances of waiving its presentation, BILL OF LADING AND CARGO MANIFEST number of copies it should be issued in and its destination, among other elements. The product from abroad, transported by any mode, is registered in a cargo manifest, presented by the responsible LOGISTICS & FACILITIES INCOTERM for the carrier vehicle, with a copy of the corresponding Bills of Lading, which identify the cargo unit in which the The Brazilian import and export process allows any sales product supported by it is contained. condition practiced in the international trade, although some may have barriers that make their use unfeasible, For each unloading point in the customs territory the since they are not compatible with the Brazilian legal vehicle must bring as many manifests as are the locations system. The International Commercial Terms (Incoterms), – abroad – where it has received cargo. 18
The original bill of lading, or a document with an great majority) or non-automatic way by means of equivalent effect, is the proof of the product possession or the Siscomex. ownership. Each bill of lading must correspond to a single import declaration, safe any exceptions stipulated by the Depending on the product to be imported, it requires the Federal Internal Revenue Service. manifestation by other agencies, other than the customs authority. This is what takes place, for example, with CERTIFICATE OF ORIGIN products subject to the health control authority, when the consent of Brazilian Health Surveillance Agency Certain goods may be subject to tax exemption or tax (ANVISA) or Ministry of Agriculture, Livestock and reduction as a result of international treaties entered Supply (MAPA) is required. Other products may be into Brazil. The customs treatment deriving from an subject to the consent of the Army, the Brazilian Institute of international act firmed applies exclusively to a product Environment and Renewable Natural Resources (Instituto originated from the beneficiary country. Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis - IBAMA), Federal Police (PF), among others. A product’s origin country is where it has been produced Thus it is important to check before sending the product or, in case of a product resulting from a material or since some LI requires a previous authorization even manpower from more than one country, where it has before shipping the goods. undergone a substantial transformation, that is, which confers on the product a new individuality. The purpose IMPORT DECLARATION (DECLARAÇÃO of the Origin Certificate, or a similar, is to documentarily DE IMPORTAÇÃO - DI) attest the origin country of the product, which is determined according to specific locally added contents. The import declaration is the base document for the import forwarding process, and should contain the importer’s As previously informed (Origin and Source), goods that identification, as well as the product identification, are subject to antidumping duties, when imported from classification, origin, and customs value. non-affected countries, shall be supported with Non- preferential Origin Certificate. The import declaration register consists of its numbering by the Federal Internal Revenue Service, by means of 19 HOW TO IMPORT INTO BRAZIL IMPORT LICENSE (LICENÇA DE the Siscomex, when the import forwarding process is IMPORTAÇÃO - LI) considered started. The import of a product may be subject to licensing, The Brazilian legislation stipulates time frames to start which will take place either on an automatic (in the the forwarding process of up to ninety days from the
unloading, if the goods are in a primary zone bonded declaration (DI) is registered. Usually, the state tax area; of up to one hundred twenty days from the goods (ICMS) is also paid before completing the customs entry in a secondary zone bonded area; and up to ninety forwarding process. days, computed as of the receipt of the postal remittance arrival notice. PROOF OF IMPORT (COMPROVANTE DE IMPORTAÇÃO - CI) The import declaration should be instructed with the original copy of the bill of lading or an equivalent It is a document evidencing the import, issued after the document. The first original of the commercial invoice, customs clearance of the product which declaration has signed by the exporter; the proof of payment of the taxes, been registered in the Siscomex. Customs clearance in the if required; and other required documents as a result of international agreements or under the law, regulation or a import is the action through which the customs checking regulatory act. conclusion is registered. After customs clearance, the product delivery to the importer will be authorized. The customs-related taxes (II, IPI, PIS-Import, and Cofins-Import) should be paid by the time the import LOGISTICS & FACILITIES 20
08. NONTAXING RULES ENTAILED TO THE IMPORT As a general rule the importers are assigned responsibilities •AGoods subject to Health Control, in addition to inherent in the: specific rules in the import of Chemicals, Drugs, and Explosives. •AConsumer’s Protection Code; •AEnvironmental Legislation; and 21 HOW TO IMPORT INTO BRAZIL
09. IMPORT PAYMENT METHODS The import payments can be made in various ways, all The maximum advance time is one hundred eighty (180) of them following the methods normally used worldwide, days as of the contemplated date for the shipment abroad or with a contingent financing by the Exporter (Supplier for the product nationalization. Exclusively for machines Credit) or by the Importer, by means of financial or equipment with a long production or manufacturing institutions in Brazil or Abroad (Buyer Credit). cycle on request, the advance time should be compatible with the production or item commercialization cycle, noting that the maximum advance time is one thousand The simplest and most common used methods and eighty (1080) days. are: Advance Payment, Documentary Collection, Documentary Credit, and Open Account. These methods On this transaction method, the importer, in possession of are shortly described ahead. the Proforma Invoice (or an equivalent document) makes the payment to the exporter (by contracting a currency CASH IN ADVANCE exchange operation). Once the receipt is confirmed the exporter performs the shipment and sends the original The payment, in this method, is made prior to shipment in documents (via courier service) directly to the importer. instances of goods, which will be imported directly from In possession of the original shipping documents the abroad on a final basis, including under the ‘drawback’ Importer proceeds to the product nationalization. regime, or when intended for admission to the Manaus In the event the product shipment or nationalization does Free-Trade Zone, to Free-Trade Areas, or Industrial not occur up to the reported date, the importer should Warehouse, or for the nationalization of goods which provide the repatriation of the sums corresponding to the LOGISTICS & FACILITIES have been admitted under other special or atypical payments made, within thirty days. customs regimes. DOCUMENTARY COLLECTION IN CASH The currency exchange settlement is allowed as long OR ON CREDIT as the advance payment for the import is supported on commercial operations actually contracted abroad, and In this method the exporter ships the goods and hands their condition is contemplated in the trading contract, the documents to a bank so his/her counterparts abroad Proforma Invoice or an equivalent document where the provide the collection with the importer. The documents goods sums and delivery time are expressly contemplated. are usually followed by a draft (bill of exchange), in cash 22
or credit, drawn by the exporter against the importer. It is are in good order), advises the Issuing Bank on the a note representative of the debt. negotiation, and forwards the shipping documents asking for the reimbursement. The issuing Bank advises If the collection is IN CASH, the Importer makes the Importer that makes the payment to the Bank (by the payment to the Bank (by contracting a currency contracting a currency exchange operation). Upon the operation), and picks up the shipping documents in order arrival of the shipping documents, the Issuing Bank hands to subsequently conduct the product nationalization. the shipping documents to the Importer who conducts the product nationalization. If the collection is ON CREDIT, the Importer performs the acceptance on the draft (bill of exchange or cambial), If the Letter of Credit is IN TERM, the Exporter will picks up the shipping documents, and proceeds to the present the shipping documents attached with a draft to product nationalization. Two business days prior to the the trading Bank, which makes their remittance (provided draft due date, the Importer makes the payment to the that the documents are in good order) to the Issuing Bank Bank (by contracting a currency exchange operation). requesting the reimbursement on the liability due date. DOCUMENTARY CREDIT OR LETTER The Importer gives his/her acceptance on the draft (bill of OF CREDIT exchange or cambial), picks up the shipping document, and conducts the product nationalization. Two business Documentary credit is a method used on the high-risk, days prior to the draft due date the Importer makes the nonpayment operations (commercial and/or political), and payment to the Bank (by contracting a currency exchange it constitutes a method through which the bank (issuing operation), which, in turn, reimburses the Trading Bank bank) – acting on request and on account of the importer for payment to the exporter. (taker) – undertakes the commitment, in last instance, to pay to the exporter (beneficiary). Thereby, it allows a OPEN ACCOUNT IN CASH OR ON bank to take on the role of the operation payer. CREDIT Being a firm commitment by the issuing bank (as it should On this payment method the exporter finances the importer be irrevocable), it may involve an additional commitment directly in Brazil (Supplier Credit) without the need for a by another bank (confirming bank), imparting a greater financial institution in between. 23 HOW TO IMPORT INTO BRAZIL safety to the operation. Such commitment is obviously conditional: the payment is assured as long as the beneficiary It is indicated for operations where the commercial complies with all terms and conditions stipulated in the relationships between the parties are already established, “credit”, and presents the required documents. and there are no assurances on the part of the importer. The financial conditions should be those which better If the Letter of credit is IN CASH, the Exporter will adapt to the commercial operation characteristics, and present the shipping documents with the trading Bank, may be in cash or supporting a payment time granted by which makes the payment (provided that the documents the exporter.
This payment method implies the shipment and remittance IMPORT FINANCING of the relevant documents by the exporter directly to the importer prior to the payment. This will not even issue Financing for the purchase of goods from abroad are or accept any note, which may legally bind him to make usually made by Brazilian financial institutions, allowing the payment. for a better cash flow of the importer. If the Open Account is IN CASH, the Importer makes Local leasing of imported product is long-term funding the payment to the Exporter (by contracting a currency option in which a financial institution, usually aided by a exchange operation), and subsequently conducts the Brazilian trading company, imports the good. product nationalization. It is usually used for machinery and equipment intended If the Open Account is ON CREDIT, the Importer makes for fixed assets of the importer in Brazil. In this operation the product nationalization and makes the payment (by may be included all import costs and eventually the contracting a currency exchange operation) two business assembly and installation of the equipment. days prior to the due date. It is worth bearing in mind that after the latest changes made FINIMP – IMPORT FINANCING to the Brazilian rules for foreign currency, the currency exchange contracting, with the actual remittance of funds It finances the partial or total value of the acquisition cost for paying the obligations to the exporter, can be made of a product abroad, enabling the immediate payment to ahead of the invoice original due date, and there shall be the foreign exporter as agreed in the negotiation (cash or no longer an entailment between the currency exchange at maturity). It may be contracted for settlement in the operations and their respective import declarations. short term (up to 360 days of shipment) or long-term (over 360 days of shipment), in this case, it requires the IMPORT FINANCING ABOVE 360 DAYS issuance of ROF (Financial Operations registry). It is important to inform that both operations directly FORFAITING LOGISTICS & FACILITIES financed by the Exporter and those financed by the Importer, via financial institutions, and with time frames Forfaiting or Draw Discount is a foreign trade operation longer than three hundred and sixty (360) days, shall be in which the exporter provides financing to his/her buyer registered with the Central Bank of Brazil (Banco Central through a bank that approves the importer client’s risk. do Brasil - BACEN), through a Financial Operations The operation consists in the purchase of receivables in Record (ROF), before the product nationalization, against the long term (Bill of Exchange, for example) by a Bank, a declaration by the importer and a formal manifestation usually situated in Brazil, without prejudice against the by the creditor. exporter, and with cash payment. 24
10. LOGISTICS IN BRAZIL The concept of logistics comprises all activities related to The most important Brazilian cities and large consumer the acquisition, transport, transshipment, and storage of centers, like São Paulo and Rio de Janeiro, are located goods. It is generally understood as particularly related close to the coast. The southeast region corresponded to the flow of materials (raw materials, intermediate and to 52% of the regional shifting of cargo, in 2015, as per end products), but also involves services and information Brazilian National Agency of Waterway Transport – provided to companies. ANTAQ (Agência Nacional de Transportes Aquaviários), reaching 523.8 million tons of volume, due to the clearance The areas making up a complete logistic strategy should capacity of the products. The most important ports of the include: transport; outsourcing; competitors; human region are listed ahead: resources; supply chain management; information management; optional analyses; communication; actual •APort of Santos; location cost; specialized competency centers; network •APort of Vitória; and projects; insurance limits and insurance coverage. •APort of Rio de Janeiro. MAIN METHODS OF CARGO TRANSPORTATION TO AND IN BRAZIL The south region is an alternative for maritime routes and as important as the southeast region. According to ANTAQ data, the south region was responsible for handling 142.6 MARITIME million tons of goods shipped in 2015, with the volume concentrated with, besides internal logistics, China, It is the most economical method of transportation to United States and Argentina. The region has important 25 HOW TO IMPORT INTO BRAZIL move great amounts of cargoes through long distances, in ports, as listed ahead: addition to a huge variety of route options. With a coast spanning 8.5 thousand navigable kilometers, Brazilian •APort of Paranaguá; ports moved, in 2015, 1.007 billion tons of a wide variety of imported and exported goods. •APortonave;
•APort of Itajaí; port concept, in which the international transport ships unload the goods at a main port, transshipping the loads •APort of Rio Grande do Sul; and to smaller ships. These, in turn, perform the coastwise trade transport along the Brazilian coast serving other •APort of Itapoá. ports in Brazil. Although not included among the seven main Brazilian Despite the recent growth in the number of container carrying cabotage ships, the number of departures is still ports, the ports of the Northeast Region and the Amazon very limited. One of the reasons for the low offering of Basin (Bacia Amazônica) are well developed and ships for cabotage is still the difficulty for a balanced have received constant investments in infrastructure; trade, since the north-south cargoes flows are way greater especially the ports of Salvador, Fortaleza/Pecém, and than the south-north flows. Manaus.The region, was responsible for shipping 336.6 million tons of goods in 2015, mainly from United States, AIR TRANSPORT Colombia and Argentina. Must be highlighted the Port of Suape, that is potentially one of the hubs ports for the Air transport is quite efficient for loads with reduced weight South America, and the first in the Northeast in terms of and volume, high added value, and those which require an general cargo volume. Suape has a conception as port and optimized delivery. This method of transportation handles industrial complex offering exceptional conditions for less than 5% of the Brazilian foreign trade. new industrial enterprises. Brazil is served by main national and international The maritime traffic between the United States and airlines, with major concentration of international flights Brazil is regular and served by first-class shipowners. in the southeastern region of the country, particularly in The approximate transit time ranges from 16 to 27 days, São Paulo. depending on the port of origin. Since the schedule Three of the four busiest airports in Brazil, are located can be changed without any prior notice, all schedules in the southeastern region, two are located in São Paulo must be checked with the shipowner before performing LOGISTICS & FACILITIES (GRU Airport, São Paulo/Guarulhos – Governador André any operation. Franco Montoro International Airport; and VCP Airport, Viracopos/Campinas International Airport, in Campinas) CABOTAGE (COASTING NAVIGATION) and one in Rio de Janeiro (GIG Airport, Rio de Janeiro/ Galeão – Antonio Carlos Jobim International Airport). Aimed at optimizing the use of their ships and serving the This explains why the region accounts for nearly 75% of entire Brazilian coast, shipowners started using the hub the air shipments. 26
Regarding the route Brazil-United States, a great Currently, the railroad system totals 30,500 kilometers, number of international flights depart from the United serving all Brazilian territory extension. The country States to various Brazilian states. It is worth stating the expects to have more 7,500 kilometers until the end of the great concentration of aircrafts coming from Miami to Program of Investment in Logistics (PIL). São Paulo. SMALL VOLUME EXPORT ROAD TRANSPORT The small volume exporters have the option of using Road transportation is Brazil’s most used land companies specialized in cargo consolidation. For transportation method, particularly for the imports coming maritime transport, there are the Non Vessel Operator from South American countries, such as Argentina, Chile, Common Carrier (NVOCC) agents. For the air transport, Uruguay and Bolivia; also it is the most important method to transport goods inside the country. A study conducted the cargo transit procedure (transitário de carga). by the Brazilian National Transportation Confederation (Confederação Nacional do Transporte - CNT) shows The United States relies on a number of options of that the road transportations represent 61% of the cargo companies in these industries, which are responsible for handling in Brazil. receiving the cargo, performing the customs clearing and providing the export shipment. As these companies work According to CNT, the last survey in 2015 indicated the with various exporters, they optimize space use through existence of 1.7 million kilometers of roads in the country, economical batches, and consequently reduce costs. of which 12% are paved. Of total roads, the vast majority are municipal control, 73%, while 13% are state and 4% INSURANCE are federal. Contracting insurance in Brazil is a process which has to be RAIL TRANSPORT conducted in compliance with Law Decree no. 73/1966 by the National Private Insurance Council. SUSEP – Private The rail method of transportation is, in particular, Insurance Superintendence stipulated, via Circular Letter characterized by its capacity to transport large volumes, with high-energy efficiency, especially in instances 354, of November 2007, the conditions for contracting 27 HOW TO IMPORT INTO BRAZIL of medium and long-distance displacements. It transport insurance (national and international), and the further presents greater safety in relation to highway rules follow the same assumptions found in the Institute transportation, with lower accident rates and a lower Cargo Clause, which is the global standard for transport occurrence of thefts and robberies. insurance, and is adopted by the United States and Europe.
11. ABOUT OUR SPONSOR CISA TRADING. THE BEST SOLUTIONS process. In addition, Cisa also offers interpretation and IN INTERNATIONAL TRADE advisory guidance to clients on taxes, customs and current regulatory legislations. In order to offer the best solutions to companies that need specific know-how in international trade, Cisa Trading When offering solutions beyond customers’ expectations, structures its operations with strategic partnerships Cisa Trading optimizes operations’ value, assists with its all around the world becoming specialized in various financial feasibility and ensures efficient logistics. market segments, such as automotive, IT, pharmaceutical, chemical, ferrous, nonferrous, telecommunications, COMPLETE INFRASTRUCTURE TO cosmetics, machinery and equipment. MEET CLIENTS’ NEEDS While the client concentrates in its core business, Cisa Cisa Trading has an infrastructure capable of dealing with Trading takes care of the import processes, operations every situation and type of demand of its clients. It has and financial planning, as well as the transport and the offices and branches in several states of Brazil and abroad. payment of taxes and import dues. Cisa Trading operates with warehouses and integrated INTEGRATED AND INNOVATIVE logistics companies that obey the mandatory legislations. SOLUTIONS FOR INTERNATIONAL In addition, it uses large size general warehouses with TRADE LOGISTICS & FACILITIES managing stock systems and acclimatized areas. Cisa Trading has a highly qualified and committed group THE LATEST TECHNOLOGY TO of employees that take care of its customers’ needs and provide integrated solutions that make a difference. ENSURE FAST RESPONSES AND QUALITY Cisa’s service scope includes inbound and outbound logistics activities, customs clearance, warehousing and At Cisa Trading technology dominance is present handling of products in primary and secondary zones and in every step of the import and export process, from documentation analysis. Cisa Trading offers total follow- the product boarding at its origin to the delivery at the up to the client in every step of the import and export end customer. 28
In order to guarantee even more efficient in the •AMachinery & Equipment: Cisa Trading has operations, the company is continuously investing in IT. vast experience in this segment, coordinating Cisa Trading’s systems use the latest technology to ensure all the operational relationship with the main service quality and fast responses. regulatory agents (RECEITA FEDERAL, DECEX, MDIC, among others); Cisa systems totally integrate with its branches, clients and suppliers, with systems such as Enterprise •AFerrous/Nonferrous Metals: Cisa Trading Resource Planning (ERP) and Foreign Trade System, operates in partnership with the world’s Order Management (CWO) and Tracking (FINDER) largest producers and exporters of copper and via web for export and import, and Radio Frequency molybdenum trioxide, as well as the main iron Identification (RFID). These are some of the tools used and steel manufactures in the world to buy high by Cisa Trading to ensure information quality, security, quality products and trustworthiness such as flat monitoring each step of the operations, controlling coil and plates and wire-rod coils, bundles, bars costs and, most importantly, meeting the customers’ need and beams. Cisa offers import operations capable and expectations. of reducing costs of acquiring these products; SPECIALIZED IN VARIOUS MARKET •AAutomotive: Cisa Trading has the structure SEGMENTS to organize and manage vehicle imports, having already imported more than 500,000 (five hundred Cisa Trading operates in various market segments with thousand) cars; several companies and big multinational clients. •AChemicals: Cisa manages all stages of import In order to offer excellence to its customers, Cisa has of chemical products adopting preventive created business units specialized by product type, with a technically qualified and highly experienced team that procedures according to the risk number (UN understands clients’ needs and anticipates solutions. classification), class and subclass; The business units and administrative/financial units •ATelecommunications & Home appliances: are designed to monitor each stage of the operations Cisa Trading has expertise in importing high-tech 29 HOW TO IMPORT INTO BRAZIL to guarantee flawless and efficient product delivery to products, and it is specialized in offering the best the customer. logistics option to the clients;
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